Sam Bankman-Fried, the once-lauded co-founder and former CEO of cryptocurrency exchange FTX and trading powerhouse Alameda Research, has been convicted on a septet of charges encompassing fraud and money laundering activities.
The charges and the verdict
The Southern District of New York’s U.S. attorney’s office delineated the charges as part of an intricate scheme that involved the misappropriation of several billion dollars of customer funds entrusted to FTX, alongside deceptive practices aimed at investors and lenders of both FTX and Alameda Research.
Delivered on a Thursday, this verdict comes at the culmination of an exhaustive five-week trial that peeled back layers of complex financial dealings, revealing the crux of how a crypto behemoth and its affiliate trading entity spiraled into collapse nearly a year prior.
Roughly 11 months ago, the Department of Justice took the decisive step of indicting 31-year-old Bankman-Fried.
After a mere four hours of deliberation, the jury arrived at a unanimous decision, convicting Bankman-Fried on six fraud-related charges and one money laundering charge.
How Bankman-Fried Scammed $8 Billion from FTX Customers and Got Convicted
The revelation that initiated the downfall of Bankman-Fried was a CoinDesk exposé in November 2022, which brought to light a compromised Alameda balance sheet. This disclosure sparked widespread trepidation within the industry about FTX’s financial health.
As the narrative unfolded, the magnitude of the crisis became glaringly evident: FTX and Alameda executives were implicated in the alleged embezzlement of more than $8 billion in customer assets.
During the legal proceedings, Bankman-Fried asserted his innocence, claiming that no fraudulent intentions were at play and that Alameda had merely “borrowed” from FTX.
In stark contrast, prosecutors charged that Bankman-Fried’s actions were laced with duplicitous promises, directly causing the loss of billions for a multitude of FTX investors.
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They further contended that despite multiple junctures where truth could have prevailed, he instead chose to reinforce the deceit.
The December 2022 indictment from the DOJ articulated that Bankman-Fried willfully engaged in fraudulent activities, leveraging customer deposits for unauthorized investments, satisfying debts, and covering assorted expenses.
The jury, upon weighing a substantial cache of incriminating evidence, endorsed this narrative as factual.
The sentence and the future
Bankman-Fried now faces a combined potential imprisonment of 115 years, reflecting the gravity of the seven charges.
While these figures are declared by U.S. Congress primarily for informational purposes, the actual sentencing will rest in the hands of a presiding judge.
